In a testimony presented before Congress’ Joint Economic Committee on 13 November, the United States’ Federal Reserve leader warned that the current economic policies of the country were not ‘sustainable’, adding that it was not the job of the Federal Reserve to fix it.
National Debt Growing Quicker than Nominal GDP
Jerome Powell, the head of the United States Federal Reserve said that the country’s national debt was growing faster than nominal GDP. He added that in the long run, this shall not prove to be sustainable. He further said that fixing the situation was not up to the Federal Reserve.
“How to fix that — it’s easy to say that — how do you do that and when do you do that is an issue that is up to you and not to us.”
He called for the debt crisis to be addressed soon, warning that if such a course was not followed, the future generations of the U.S. citizens would end up spending money in the form of taxes for servicing debt and not for things they would actually want. The U.S. national debt is already more than $23 trillion, or $69, 801 per citizen.
The very reason behind the creation of Bitcoin in the year 2008 was a debt-laden economy. Fiat money, often and wrongly so, is thought to be very stable. However, in times as these, when nations make war with each other using trade as a major weapon, there is nothing more unstable than fiat money given that its value depends on numerous global factors. The hyperinflation in Germany after World War 2 serves as a great example of the volatility of fiat currency. Therefore, cryptocurrencies, decentralized and out of the control of state powers, come as saviors.